Can we eliminate fraud with Blockchain Technology?

Many (even those who love crypto-currency) believe that the current crop of Initial Coin Offerings (ICOs) are in a bubble that can’t be sustained. It’s been compared to the bubble of the early 2000s for web technologies, and the failure rate of new blockchain companies is expected by some to be higher than the one that followed the dotcom boom (at over 90%).

That’s not to say that the technology itself isn’t sound. Neither is it to suggest that there are huge risks to any new technology. The dystopic predictions of those who suggest a possible Rise of the Machines should be noted.

A podcast from Sam Harris features an interview with computer scientist Eliezer Yudkowsky on alignment and recursive self-improvement, who says:

It now seems (after the modern revolution in AI) significantly more probable that an AI might need to do significantly less self-improvement before we start worrying about alignment.

However, wise investment in the blockchain sector – buying coin or tokens in companies whose teams have a record of experience in the cryptosphere and tech, such as LockChain (now operating in the hotel and accommodation industry) – may mitigate risk, at least from a financial perspective, for any venture capitalist.

According to this piece on Brave New Coin, the financial services sector could benefit greatly from the new tech. Money laundering and corruption cause major losses for banks and countries worldwide. $16 billion was lost to victims of identity theft in 2017.

In the EU, anti-money laundering legislation compels banks to upskill staff on and impose the rules allowing maximum over-the-counter cash deposits, for example, and transactions of large amounts need to be flagged. Blockchain technology could be used to potentially process fiat transactions and ascertain the identities of individuals without the need to impose such limits.

Accountancy errors could also be reduced in number.

Blockchain’s weaknesses include lag at times of high traffic (such as pre-ICO-sales and the ICOs themselves). Certain elements on a platform that don’t necessitate security or encryption (in the case of LockChain, this includes accommodation and hotel room photos) can be stored on servers, to reduce the possibility of slow-moving transactions. However, blockchain technology is improving, with the addition of further layers. It’s estimated (citing the piece on Brave New Coin) that blockchain technology could save the financial sector $20 billion annually in infrastructural overhead. For many reasons, the move to the new technology is an attractive one.